Abstract
The current paper has focused on the foreign owned Czech banking sector and potential risks which has been nowadays more and more discussed within the context of past crises. A possible transformation of Czech subsidiaries, Czech banks, to the branch offices of their foreign parent companies in the near future will mean decrease of government's income from taxes that could affect the whole Czech economy. Aim of the current paper is to examine how negatively could change the role of Czech banks’ parent companies whose ownership can impact on the development of the government debt in the Czech Republic. In this study, it was found significant negative relationship between growth rates of the both, government debt and taxes from banks’ earnings. From results of this article it is made future implications for the monetary as well as fiscal policy.
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